The Selfish Capitalist: The Origins of Affluenzaby Oliver James 400pp, Vermilion, £14.99

Oliver James is an assiduous trawler of the densest psychological and psychiatric studies to retrieve the nuggets of wisdom buried therein. He's also a modern day missionary, fired with a passionate desire to relieve the growing emotional suffering in rich countries, which has led the World Health Organisation to predict that depression is on track to become the second most widespread disease, after heart disease, in the developed world by 2020. His writing career has been an attempt to marry these two impulses (which can often tug in opposite directions) and thus bring to a wider public the growing body of research, particularly in the US, into what constitutes human well-being and why it appears to be in decline.

But is James the meticulous researcher or the proselytiser? The dilemma as to which takes precedence has dogged his books. In the past he has swept from analysing Mia Farrow's penchant for adopting children to the fine detail of academic studies of the life outcomes of the offspring of large families. Such transitions can feel very bumpy - quite apart from publishers finding it difficult to know to whom they are marketing the book.

James's wrestling with different ways of presenting his argument takes a new form this time round. A year ago he brought out Affluenza: How to Be Successful and Stay Sane, which skirted close to the self-help genre with its checklists for self-diagnosis, instructions on how to put the malaise right and enliveningly lurid anecdotes about a colourful range of characters suffering badly from affluenza. Now comes The Selfish Capitalist, a "companion volume" which prompts questions such as did he forget - or subsequently discover - some material? Or does it mean that the author is having two bites at the cherry? In fact the backstory is that this book started life as an appendix to Affluenza but ballooned to unmanageable length and was cut. It's now been resurrected as a new book detailing the academic research that underpins the ideas he explores.

So if Affluenza was the proselytiser's tract, this is the researcher's reasoned treatise; it's an awkward compromise because it looks as if James hasn't decided how to win the battle of ideas. Having tried to convert one audience with populism, he now wants to reinforce his case with some intellectual rigour. There's plenty of reason to sympathise with what he is trying to do, but the strategy runs the risk of denting the impact of both books. Neither achieves that elusive goal of the "must-read" which permanently reshapes a debate and penetrates the political/policy worlds as, say, Robert Putnam did in his book on social capital, Bowling Alone. There is a possibility that if James had taken more time to weld his material into one book, he might have achieved a comparable shift in our understanding of mental health. Instead, when reading The Selfish Capitalist one is hampered by the sense that this is vaguely familiar ground.

That's a great shame because James is charting the new frontiers in psychology which have the potential to be the most significant indictment yet of the form of market capitalism that has held sway across the English speaking world for the past generation. As the burgeoning happiness-book industry - led, curiously, by economists such as Richard Layard, and political scientist Robert Lane - have well established, our hugely increased wealth over the past half century has done nothing to increase our happiness. Where James now develops the argument further is in pointing out that not only does market capitalism have little impact on improving levels of happiness, but it actually increases certain types of mental illness.

Given the frequency with which reports appear in the media about rising levels of emotional distress (anxiety, panic attacks, depression) among children and teenagers, James will find a receptive audience, eager for explanations. Whether they will be convinced by his argument that market capitalism is the cause of mental ill-health is another matter; we have had various competing explanations for social ills in recent decades, usually sponsored by the right, ranging from rising divorce rates and moral breakdown to decline in religion. James has now provided the left - if one can still talk in such terms - with a powerful counter-argument: our emotional malaise is not an accidental byproduct of market capitalism, but a direct result of increased competitiveness and the way that it exploits our insecurities.

The single most important idea to which James needs to apply all his missionary zeal is that mental well-being is a public health issue. Happiness is not a matter of personal performance and effort ("I've achieved it" or "why have I failed?") but a product of a set of environmental - social, economic and cultural - circumstances. The highly unequal, competitive, materialistic and individualistic cultures of neo-liberal economies produce emotional distress; they cultivate the insecurities which drive hyper consumerism ... and thus they make us ill. In the most telling analogy of the book, James argues that materialism is to ill-being what smoking is to lung cancer.

Drawing extensively on the work of American psychologist Tim Kasser, James argues that our recent increased wealth has come at the cost of the emotional well-being of a large proportion of the population; rates of distress among women in the UK almost doubled between 1982 and 2000. This is true of New Zealand and Australia as well as the UK and the US, in striking contrast with more egalitarian and collectivist countries such as Denmark or Germany. He tracks how "selfish capitalism" generates insecurity and inflates comparisons; how a winner-takes-all competitiveness merely creates losers and a pandemic of low self esteem, with its compensatory pathologies around celebrity and status.

Remarkably, Erich Fromm, the Marxist psychoanalyst and Buddhist writer, foresaw much of this half a century ago and James quotes his prescient analysis of the "passive, empty, anxious, isolated person for whom life has no meaning" and who compensates through "compulsive consumption". There are interesting issues to draw out of Fromm's work about how our mass consumer societies, ironically, cripple personal agency despite their avowals of individual choice, but James doesn't dwell on this. In fact, agency remains a confused thread in his argument: exactly who is the selfish capitalist? And is there a hint of a conspiracy theory as to how selfish capitalism has "hijacked" the English-speaking world to establish a political economy which benefits only a wealthy elite? He refers to an "invisible hand" which suppresses those ideas which challenge selfish capitalism, lulling us all into a false consciousness, but one wishes he would come clean, name the culprits and provide an explanation of why and how they hoodwink us.

This is where the book is least convincing, as James attempts to explain why "selfish capitalism" has taken hold across the world, why democracies have - contrary to both their economic and emotional interests - elected Thatcher, Reagan, George Bush and New Labour (on this last, his disillusionment is vicious). He takes pot-shots at Richard Dawkins's The Selfish Gene for providing some intellectual cover, and even at Richard Layard's influential advocacy of cognitive behaviour therapy, accusing it of being a sticking plaster for a sick society which encourages individuals to think positively rather than challenge the status quo. But he concludes with a disclaimer that these are "hares which other researchers may wish to chase", which is a bit of cop-out. He could have taken more time and thought through parts of his thesis more rigorously, to ensure that it captures the political agenda in the way it needs to; is this playfulness or dilettantism? Either way it is at odds with the seriousness of what's at stake.

To follow James's analogy with smoking: it took roughly 50 years from the first serious evidence of its harm to health to the point last year when smoking in public places was banned in the whole of the United Kingdom. We are now at the beginning of the cycle and James has played a major part in popularising vital ideas; but ahead lies a long, slow slog against powerful vested interests to win the battle.